ERM, Self-Organization, Networking, and Financial Performance

This dissertation examines the impact of enterprise risk management (ERM), self-organization, and networking on financial performance within the context of Australian public procurement contracts. It begins with an introduction outlining the research topic, aims, objectives, and research questions, followed by a literature review that synthesizes existing academic work on the subject. The literature review delves into the importance of identifying and managing risks in a competitive business environment, highlighting the role of technology and tools like ERM. The dissertation also explores the relationship between ERM and financial performance, discussing various advantages and disadvantages of ERM implementation. The study aims to investigate the establishment of risk management processes and their effect on business performance, sustainable development, and good governance. The objectives include analyzing business capture policies, evaluating risk resilience, determining natural resource management, examining the relationship between public governance and private business development, and assessing government promotion of innovation through procurement. The research questions are designed to explore when and how business capture policy making, how businesses can play a role in building communities' risk resilience in the face of natural disaster, how management of natural resources such as forests, water etc. contribute to sustainable development, what is the relation between public governance and private business development, and how can governments promote innovations through procurement. The research significance lies in its potential to inform action and contextualize findings within a larger body of research, with implications for policy and future project implementation.

Dissertation
(Enterprise risk management, self-organization,
networking and financial performance in Australia
public procurement contract)

Table of Contents
BACKGROUND.............................................................................................................................3
AIMS AND OBJECTIVES.............................................................................................................3
REFERENCES..............................................................................................................................15

Topic: Enterprise risk management, self-organization, networking and financial performance
in Australia public procurement contracts
BACKGROUND
AIMS AND OBJECTIVES
Aims:
“To investigate impact of establishing risk management process within organisation on the
business performance sustainable development regarding business corporation, good governance
and promotion of safety”.
Objectives
 To analyse the making of business capture policies by organisation.
 To evaluate the role of business in building risk resilience communities in the face of
natural disaster.
 To determine the management of natural resources for contributing to sustainable
development.
 To examine the relation between public governance and private business development.
 To assess the promotion of the innovation by government through procurement.
 To provide recommendation for
Research questions
 When and how do business capture policy making?
 How can businesses play a role in building communities' risk resilience in the face of
natural disaster?
 How can management of natural resources such as forests, water etc. contribute to
sustainable development?
 What is the relation between public governance and private business development?
 How can governments promote innovations through procurement?
Research Significance:
The research serves the purpose of informed action. The dissertation pursues to
contextualize its findings within the larger body of research. This research serves high quality in
order to produce knowledge that is applicable outside of the research setting. Furthermore, the
results of study have implications for policy and future project implementation.
Research rationale:

Research structure
CHAPTER 1: INTRODUCTION
This is the first chapter in the research study which comprise the research topic, aim,
objective and questions. The chapter starts with writing of the overview of the research topic and
what the research is all about and what exactly is going to be researched in the following
dissertation. The chapter consists the background of the study as what exactly the research is
about and how what is the structure of the whole thesis. This chapter narrow down the focus and
defines the scope of the research. Here a discussion related with state of existing research on the
topic is conducted and the relevance of the research is depicted in to answer the research issue in
border way. In this chapter an overview of the dissertation structure is presented.

CHAPTER 2: LITERATURE REVIEW
The chapter 2, literature review is presented to gain a thorough understanding of the
academic work that already exist on research topic. This means that from in form of books and
journals different sources are collected with by selecting the most relevant ones. The opinion,
thoughts, perceptions and views in those selected sources are than presented in the form of
critical evaluations with analysing each chosen source. The connection of the drawings form
different sources is built up in form of patterns, themes, conflicts and gaps. In this chapter a
coherent structure and argument that leads to clear basis or justification of the research is
presented. The literature review chapter of the research forms the basis for a theoretical
framework for defining, analysing the key theories, concepts and models to frame the
dissertation.
2. Introduction
In recent times it is important for business to identify risks so that it can be managed. in
such a competitive environment, there are many challenges and risk that business has to face.
Due to shift in risk operations are affected and resources are over utilised. However,
advancement in technology has offered various types of tools and techniques that can be used by
business. It has made it easy for them to resolve problems by using technology. The major
challenge today businesses are facing is ineffective identifying of risk. They are not able to
manage risk as well. So, technology has provided several tools like ERP, MIS, etc. that are used
by business to great extent. Similarly, for risk management ERM is tool that can be used. It
evaluates entire organisation risk and suggest ways to manage it. The tool can be integrated with
many other software also. However, managing risk properly allows business in their growth. It
provides enough time to take appropriate measures and minimise impact of risk. Furthermore,
strategies are developed on basis of degree of risk.
Choi and et.al. (2016) Enterprise risk management analysis applicable in the corporate
world that perform process in globally as looking the overall structure, framework which
evaluate the management system of organization. In this way, it also identifying the overall
enterprise profitability and productivity in global world. This type of ERM provide the
management with the data or information to easily optimize the earning in which firm ultimately
generate more values while maintain the risk of enterprises in proper manner. Enterprise risk

management system is providing an effective clearer language that can transfer information
about the capabilities and intentions of management system.
In global marketplace, ERM has been rapidly growing during past years within specific
regulators. As per response to the demand of people, more companies are implementing the
concept of ERM which are poorly integrated with the business practices under the same type of
label. Enterprise risk management also viewed the culmination to the risk explosion that must be
started in 1990. In this way, many companies are faced the problem or risk related financial loss.
Salloum, Jabbour and MercierSuissa (2019) In 2004, it has been clearly defined the ERM
which provide guidance in the form of documents that was published by the organizations
committee that sponsoring services. Sometimes, Enterprise risk management process can be
affected by the directors of entity boards and other type of strategy implemented for changing the
designed patterns, potential events. It may affect on the entity. It can manage the risk to give
reasonable assurance related the achievements of business goals and objectives.
Florio and Leoni (2017) The risk management is important for organization because it
increasingly the enterprise driver and other stakeholders that always concerned about the
organizational risk. This type of risk is also including as driver in terms of strategic decision. It
causes due to uncertainty that occurs in the business because the risk is mainly embedded in the
operations and functions of organizations. In most of cases, companies are considered the world-
wide approach in context of risk management and also enable the approach to identify the
significant impact of different types of risk in the business process, product and services,
activities, stakeholders. The approach might be implementing on the business activities so as it
will generate an effective results or outcome. It also offered as an upside risk.
In 2008, it has been increased the global financial crisis that directly demonstrate with the
importance of enterprise risk management. At that time. it has been published the new standards
risk management that may include principles and guidelines of risk management, international
standards. In this way, this guideline draws the development approach and implementing in the
ERM (Enterprises risk Management).
Apart from that for different types of companies, there is required to analyse and
understand the enterprises risk that being taken when specifying the goals and objectives. It will
require to attain the desirable level of awards and rewards. In this way, it will require for

organization to understand the overall embedded risk and its level in the business process. It is
very important for companies to recognise their own prioritise and understand the weak points.
For improving the risk management in the organization to develop new setting that help
to increase the efficiency and performance. Management system always taken initiatives to
establish their own strategy as per requirement and generate better results or outcome. A
successful risk management will generate the positive output by using quality assurance,
compliances and enhanced decision making. The positive results will give better options in
context of improvement related efficiency of enterprise operations, tactics and efficient strategy
in the organization.
Oh and et.al. (2018) a Successful business risk management initiative which can effects
on the consequences of risk related materialising, benefits of deliver regarding the strategic
decision making etc. these are considered as important aspects in the business growth and
development. other advantages that include reduce the capital price, appropriate financial
reporting, advantage of competition level, improve the perception level of business. in the
presence of organization in market which require to supports the legal aspects of organizations
because it helps to enhance the political culture and environment. on the other hand, it should
involve the opinion related the enterprise risk management that how it can be implemented the
strategy to achieve objectives. According to International organization for standardisation in
2001 there are total 31000 standard publish regarding the Enterprise risk. It can be used as a brief
guideline to provide answer that how to implemented the risk management process in the
business. especially, this documentation is recognising the risk in both downside as well as
upside. Olson and Wu (2017) the Review find that the overall enterprises risk for taking the
fundamental driving force in the organization when the cost of risk management become failure
and still underestimated in both internally and externally. It also including the price in terms of
business time management which help for rectify the critical situation and conditions. The
corporate governance always ensures that business risk so as to manage, understand and
communicated in proper manner.
There are various advantages of ERM that can help organization to identify risk, impact
those risk would have on the organization and ways in which it can be managed. Few advantages
of ERM are: It helps in linking growth, return and risk i.e. it helps in ensuring that all the entities
gets required return for taking calculated risks. It also helps in identifying risks, manage then till

an acceptable level so that growth and return objectives of entities are met. It also helps in
avoiding risk, reduce the impact of the risk, accept the risk or share it so that risk response
decisions can be improved. As per Brustbauer, (2016) There are two main possibilities in which
ERM have disadvantage for organizations such as: ERM takes both time and cost so
organizations need to calculate whether ERM is worth time and cost investment or not because
many times it increases the overall budget and time duration in which project is required to be
competed. ERM is one of the most important part of an organization which plays a vital role in
company’s leadership plan. If associated risks are not understood well then it can lead to
incorrect strategies and incorrect implementation of such strategies which might disturb the
overall organizational budget, increase time duration or sometimes mislead others as well.
2.1 Enterprise Risk Management and Financial performance
As per the view of Bromiley and et.al., (2015) Enterprise Risk management is that plan
which is based upon the business strategy whose main aim is to identify, asses and also prepare
for some dangers and hazard. Even many companies have been managing risk for years and this
can be done through insurance mainly. Therefore, it clearly reflects that in business Enterprise
Risk management (ERM) only includes methods as well as process that is used by the
organization in order to manage the risk and also get hold of different opportunities which are
related to attain the defined objectives. So, ERM is the framework mainly used to minimize risk
and then create values for their stakeholders too. In this modern era, each and every business
faces much and more diverse collection of hindrance and at that time, if the firm have effective
Enterprise Risk Management strategies then it will help to overcome such. These crucial risk
includes reputation, day to day operational procedures, some legal and human resource
management, financial related issues etc.
On the other side, Brustbauer, (2016) stated that Enterprise Risk Management consider as
a traditional approach in which the company should focus not only the downside of risk but the
upside as well. Moreover, the risk management is an essential element of the strategic
management and it should be integrated with all ongoing activities of a business. The author also
state that Enterprise Risk Management concept mainly includes the risk philosophy, risk culture
and risk appetite. Therefore, this state that these are the expression of the attitude to risk in the
firm and also the amount of risk that actually a firm is willing to take. On contrary, Olson and
Wu (2015) state that the complying with Enterprise Risk Management creates or generate the

awareness about the risk faces by the firm and even the ability to respond those risk in effective
manner. If the organization have Enterprise Risk Management then it automatically enhanced the
confidence to achieve the strategic objectives of the firm and therefore, it increases the efficiency
of entire operations within the working area in order to meet the defined aim in specific time.
There are different components of Enterprise Risk Management that can be establish into
the working area such that Internal Environment. As per the view of Grace and et.al., (2015)
when the resources are put to work, work culture creates a huge factor that directly influence
team risk aptitude as well as their moral code of conduct. Therefore, a healthy work culture
mainly links with the aptitude of seniors and further it is also analysed that if the senior
management is well qualified then they provide effective training session to their juniors and as a
result, it decreases the chances of risk within the working area. As a result, it is clearly realized
that company's internal environment largely influenced the quality of strategy that is used to
minimize the risk. On the other hand, Sweeting (2017) argued that beside monetary and resource
investment, if the firm identified any risk, then it is the duty of risk manager that they should
immediately response to risk and develop strategies to overcome this. Side by side, the leader
should also make effective communication and share entire information related to risk. For that
the staff must be trained properly in order to recognize the potential risk and then they should
communicate the same to their leaders as well.
In addition to this, the Enterprise Risk Management should also include effective
monitoring and for that Oliva (2016) state that the management system should be properly
monitored and modified whenever it is necessary. Generally, the risk arises at the time of
maintaining annual report and that is why, it Is essential for the company to keep evaluating and
auditing and also make separate risk management wings as well. Moreover, the professionals of
the company also work with the Enterprise Risk Management which focus on how they assess
the risk that is relevant to their companies. So, using effective Enterprise Risk Management the
company also avoid some unexpected and costly plant that might be result in shutdown of the
firm. So, it is analysed that using best Enterprise Risk Management strategies, the companies
may avoid some unwanted risk and also sustain the brand image as well.
It is also analysed by Florio and Leoni (2017) that using Enterprise Risk Management,
the company make better decisions and this data also includes the status of risk factor also help to
change the risk culture of a firm. Therefore, ERM also looks at the risk and consider or determine

the ways how to treat and exploit risk. Not only this, the ERM also increase competitive position
and then help to stay competitive in market as well. It is so because Enterprise Risk Management
helps to identify risk early and also track future potential risk as well by providing warning to the
firm. The author also states that using Enterprise Risk Management helps to increase the
financial performance of the company and as a result, it provides different growth option too.
Moreover, using ERM into the working area, the company also minimize the operational issues
and this directly creates positive impact upon the business production level so that company is
ready to meet the defined objectives in specific time period.
Saeidi and et.al., (2019) stated that while running a business, the manager or the leaders
faces multiple risk and this can only be minimized by using Enterprise Risk Management
strategies in which the system helps to describe the events which cause risk and even it also
identify various events which further provides opportunities as well. Such that when the event is
identified then the assessment should also be emphasize because the framework places a lot of
importance of assessing the risk. Thus, it also includes the risk assessment as a component in
which risk are collectively measures and further individually evaluated on how they influenced
each other. Berry‐Stölzle and Xu, (2018) argued that the Enterprise Risk Management not only
determine the risk but it identify different opportunities and also facilitated to improved decision
making, planning and also structured the understanding of opportunities as well as threat of an
enterprise.
Beside this, Enterprise Risk Management is considered as a cost centre and if the firm
measures total cost of risk before it implements ERM then the company must identify the
significant risk at the time of executing the company's strategy. For instance, there is a situation,
in which the CRO using Enterprise Risk Management process identify the supply chain risk in a
food company which is not disclosed (Enterprise Risk Management, 2017). At that time, there is
a risk flown under the radar of due- diligence team and as a result, the flooding creates
uncertainty about the quality as well as quantity of raw material. Hence, this situation damages
the reputation of the company and at that time, using Enterprise Risk Management the company
may cope up with this situation.
Thus, on the other side, Lundqvist and Vilhelmsson (2018) stated that there are some
companies who may not feel the need to measure the value of ERM and it is so because it makes
good business sense. But in today's modern era, every company uses advance tool and

analytically oriented environment that further measure the value that helps to take a business
towards success. Overall, using Enterprise Risk Management into the working area will help to
maintain the financial performance of the company and also company hardly publish any
comprehensive information related to their existing risk management but they actually use ERM
system to overcome different challenges. Study also observed that financial performance of
ERM, its impact is also measured by excess stock market returns, company's cost and revenue
efficiency that includes ROA and as well as cash flow volatility too.
According to Laisasikorn and Rompho (2019) said that It is a wide concept on the risk
management decision for organization so that it states that the complete markets require the
relevant financial decision and they do not impact on the moral values of stakeholders in the
organization. It is the better ways to increased the wealth of stakeholder and always assets the
organization to increase profitability in global marketplace. There are some important concepts
identified the (), providing the inspiration for business to take care through risk related
management, agency cost, taxes and many more.
As per Florio and Leoni (2017) it has been stated that there are multiples assumptions
exits but it doesn’t influence the financial decision of organization. the important decision is
simply distributing the income in different investors. They also act in the global market to accept
all conditions and terms in proper manner.
Gatzer tand Martin. (2015) Enterprise risk management is considered the important part
of financial policy which identifies the implications through findings or ERM strategy that
implement in the organization. Sometimes, the position of investors wealth always unaffected by
applying the risk management operations on the different part of business. As per Modigliani and
Miller theories, it can be determined that risk management is purely related the financial
transaction which has a significance in the corporate world to identify the risk. This theory is
derived the positive business risk management by implementing appropriate assumptions.
Shatnawi, Hanefah and Eldaia (2019) a performance of organization can be identified by
using financial measurement because it will generate the overall estimation in the specified
numbers. The financial measure is considered in the form enterprise efficiency and performance
that still essential for measurement entity, usually in the current economic culture or
environment. Many enterprises are targeting the rate of profit, solvency and liquidity as measure
the financial wealth of organization. Performance can be measured for identifying the profit rate

of organization from the different factors such as capital, labor and management. It is mainly
focused on the relational between the profit level expenses and revenue of business.
Oliva (2016) argue that stakeholder’s interest as main components of business policy
which are particularly based on the consumer trust, high technology services in the organization.
it also able to continues offering the services in the future development and give contribution to
the value of company. In context of financial condition, it is being highly sensitive to the
expected price/ cost. However, enterprises risk management practices must be increased to
minimize the price therefore it will increase the value of business in global marketplace.
Kopia and et.al. (2017) it can be predicting the overall risk by management practices,
which determined by the accepted practices that implement within market. Furthermore, it is an
essential to link the security aspects in the purchase’s assets, which implies the risk management
that can important in the contracts which improve the business performance and efficiency.
2.2 Enterprise risk management and self-organisation
As per the view of Jaderi and et.al., (2019) One of the most important factors on which
every organization need to focus is to identify and manage risk. A running business comes across
many different kinds of risks, some of them might be hazardous and some might not be
hazardous. If these risks are not taken care of then they can cause some serious damage to the
organization. Identification, preparation and management of risk are most of the time costly as
well as time consuming. There are various kinds of risk management techniques used by
organization for risk management which helps them to prepare for the risk regardless of the size
of the business. Risk management helps in identification, evaluation, analysis and prioritization
of risk so that its impact on the organization and its resources can be reduced. Jaderi and et.al.,
(2019) further explains that most of the organizations uses enterprise risk management technique
in which a risk is defined as a possible circumstance or event which is likely to occur and have a
negative impact on the enterprise and can influence their overall working. Impact of the risk can
be on everything such as on existence of the organization, their resources, products, capitals,
services, customers, market or environment in which they operate and many more. Enterprise
risk management is a technique which helps in evaluating risk level, risk management, impact of
risk on the organization. Each organization has a pre formulated plan for each and every kind of
a risk which helps the enterprises to deal with their possible consequences

According to the view of Priesemann, (2015) For risk management or getting prepared
for the risk it is important to first of all identify the type of risk enterprise needs to deal with i.e.
if risk becomes a reality it is the first and the foremost step to identify the type of risk an
organization is dealing with so that its impact on business can be reduced, both time and cost can
be saved other than this negative impact on the customers can also be reduced. Business risks
can be identified using various kinds of methods but each identified method relies on a specific
analysis of a business activity so that all the challenges in dealing with the risk can be identified.
Each of the identified risk can be managed either by accepting it, transferring it, reducing it or by
eliminating it. Priesemann, (2015) further elaborates that, there are various kinds of risks that can
be identified by the businesses to be taken care off such as: physical risks like building risks,
location risks, human risks, technology risks, strategic risks etc. Each of these risks are further of
various other types and impact of each risk on business is completely different i.e. impact of
these identified risks can be both severe or with least risk. After identification of risk, risk
assessment comes into picture i.e. all the identified type of risks are prioritized according to their
probability of occurrence. For example: has very less chance of occurrence, have some changes
of occurring, have small change of occurring or have high changes of occurrence. All the risks
are managed according to their chances or likelihood or occurrence so that all kinds of damages
can be taken care of and further damages can be reduced with reduction of both time and cost.
In addition to this Nishida and et.al., (2016) elaborates that, after assessment of risk is
done, its insurance is done management of risk is focused on. There are many kinds of risks that
can be insured due to which its impact and likelihood on the business can be decreased. Many
kinds of risks are automatically managed if proper insurance is done but some of the risks are of
extremely high priority and which cannot be insured so it becomes extremely important for the
organizations to manage those risks with proper planning and organization of data. After this
again analysis is done where all the risk that cannot be managed are categorized into
management and risk prevention strategy. Risk prevention is one of the most important part to be
focused on in risk management techniques. Risk prevention helps in reducing the impact of the
risk on the organizations so that if further management is required then it can be taken care off.
According to Savini, (2016) Risk at any level of organization can affect their current
operations, projects, functions, activities or projects. Without clear objectives and purposes, it is
impossible to identify events due to which risk can occur and if those events are not identified

then risk management strategies cannot be developed. So, it can be said that Risk identification
needs a clear understanding of objectives and strategies as well as modification required at each
and every level of the organization. So before identifying risk or understanding techniques used
for identifying risk, there are various factors that should be noted such as: mostly combination of
techniques should be used for identification of risk because there are many types of risks that
require a particular method to be chosen for identification, Each used technique should involve
discussions so that individual advices and concerns can also be identified. Savini, (2016) further
explains that there are various techniques that can be used for risk identification such as:
brainstorming, interviews, self-assessments, SWOT analysis, risk questionnaires, scenarios
analysis, using various technologies, risk survey, workshops and many more. After identification
of risk using enterprise risk management risk portfolio is made where risks are categorized into
four groups that are financial risks, strategic risks, hazardous risks and operational risks.
As per the view of Brüdern and et.al., (2016) Enterprise risk management is
directly/indirectly linked to self-organizations where spontaneous arrangement of risks is done in
a purposeful manner under proper conditions without external help i.e. risk is identified and
managed within organization itself without outsiders helps. ERM helps in self-organizing the
risk where it is not avoided but is faced so that greater financial stability can be achieved and
further economic or non-economic losses can be avoided. ERM is one of the most appropriate
technique that is mostly used by organizations to face any kind of risk that are within the
boundaries of the organization. There are two main key concepts of ERM that helps in self-
organization that are: to manage risk within the boundaries of the organization and to report risk
upwards within the organization to an appropriate level so that it can be attended properly and
proper required actions can be taken. Process used in ERM is not particularly different from
other type of risk management applications but has a wide process which helps in taking care of
risks at particular level of the organization. A successful risk management will generate the
positive output by using quality assurance, compliances and enhanced decision making. The
positive results will give better options in context of improvement related efficiency of enterprise
operations, tactics and efficient strategy in the organization.
As per the view of Tucker, Luu and Poulsen, (2016) demonstrates that, ERM follows
various kinds of risks standards such as: ISO standards, OGC risk management guidelines etc.
these standards are used in risk processes that are implemented at different levels of the

organizations. It also helps in building a clear understanding of what is required to be
implemented at each level within the organization so that it can be managed in particular manner.
Each risk management process within ERM technique has a particular way in which risks
management is processed within an enterprise. Basic steps involved in risks management are:
risk process initiation, risk identification, qualitative risk assessment, quantitative risk
assessment, risk response planning, risk response identification, risk review, risk reporting and
lessons learned for risk review.
Managing risks across boundaries
As cited by Dobson and et.al., (2019) There are various other processes that helps in
managing risks across boundaries as well where self-organization techniques are not used.
Whenever there is a need to manage risk across boundaries multileveled approach to risk
management does not work as it not effective across the organization. It requires risks to be
communicated between various levels so that it can be ensured that risk is addressed in a proper
manner and appropriate methods are being used for its management. There are three major
sources through which risks can occur i.e. at lower intermediate and tactical level, higher
intermediate levels and higher strategic level. Based on these sources level at which risk is going
to be managed is decided such as risks from above level is managed at just below level, risks
from same level is managed at same level and risks from below are addressed and managed at
higher or just upper level. It is extremely important for the organization to focus on the source or
way of communication through which risk will be transferred to another level to be managed. It
also helps the organization to understand the manner and level up to which impact, threats and
opportunities associated with the risks are communicated, identified and managed. This helps the
organization to translate risks in terms of qualitative and quantitative measurable terms based on
risks characteristics. It is important for organizations to focus because impact of risk also
depends upon the type of business and the market which they operate which affect the outcome
or impact of risk based on nature of the risk.
2.3 Enterprises risk management and networking
According to the view of Agarwal and Virine, (2017) network is considered as one of the
most important and primary assets of an organization and after this information technology
services are considered as second most important assets of an organizations. Most of the
organizations depend upon their network for most of the work as many organization’s save their

data on their business network, work on their products and services through their business
network. Enterprise risk management is an important technique that is used by many
organizations especially by those who are completely dependent upon their business network.
Other than ERM, organizations have two other most important processes whose main function is
to control uncertainty. First is information technology and risk management and second is
operational planning. These two processes are dependent upon correct functionality of
organization’s network. Implementation IT risk management requires a specific person or group
of people who is trained in security management area specifically and can understand all the
technologies used within an organization. Other than it is also preferred that the person should
also have prior knowledge of working in a large communication company or a company with
large network.
As per the view of Cohen, Krishnamoorthy and Wright, (2017) information technology
risk management requires companies to track, monitor and manage all kinds of security risks
associated with their business network. Each organization connect to internet need to consider all
kinds of risks associated with their business. As it has already been discussed that each business
has some unexpected risk of harmful events that can cause some damage to the company as well
as to their network. IT risk management allows business to prepare themselves as their network
to get prepared for unexpected risks so that extra cost of managing and minimizing risk can be
reduced. Risk management plan implementation helps in reducing potential risks associated with
organization’s network. Choi and et.al., (2016) furthers explains that many times in order to
expand one’s own business many organizations expand their network with other organizations
which increases risk associated with their network in terms of data sharing, data security and
many more. Both internal and external business processes are required to be focused on so that
risk associated with the business network and their impact can be identified and taken care of
such that it does not impact overall business of the organization. There are various kinds of
benefits that are associated with the risk management, such as: it helps in creating secure and
safe working environment for the organizations, their employees and customer’s, increases
business operation stability, decreases legal liabilities, provide protection from events that are
important to both business environment and the company, helps in protecting all the people or
stakeholders associated with the business and the potential harm it can cause to the business,
helps in establishing organization’s insurance in order to secure unnecessary expenditures.

Risk Resilience
As elaborated by Sekerci, (2015) Risk resilience is a kind of risk management approach
that focuses on the way organizations or business communities deal with surprises, changes and
disturbances and the way businesses think about sustainable future of their organization in the
environment of growing uncertainties and risk. In other words, risk resilience can be defined as a
practical set of tools and approaches that can be used by organizations to understand the way in
which uncertainties and risks can be dealt with. Risk resilience is an integrated concept that
allows multiple risks, stress, shocks as well as their impacts on ecosystem, organization and all
the vulnerable people involved in context of development programming. There are two most
important stages that are needed to be considered to become more risk resilient, such as: First is
to identify emerging risks in which all businesses are required to have deep knowledge and
understanding of all kinds of major risks to which they are vulnerable to. Second is to manage
risks more efficiently where businesses need to evaluate effectiveness of all current risk’s
management strategies, they use so that they can ensure robustness, relativity of all the changing
needs of regulators of their organization.
In addition to this Mikes and et.al., (2016) elaborates that risk management and resilience
are important for each and every business today as it helps in protecting and avoiding future cost
related to business. Once an enterprise is clear about the risk that are required to be faced by
them, then based on those risks’ organizations can develop a risk management strategy so that
those risks can be managed effectively and efficiently. It is also said that risk management
approaches should be included across all business operations and work ethics. This can help the
organizations to manage their financial concerns in an appropriate manner. Organization that
faces risks quite frequently can articulate risk apatite and then define their risk strategies
accordingly. This can also help the organizations in better decision making, greater agility and
sharp competitive edge. This further helps an organization with familiarity, similarity, discussion
issues that are needed to be discussed for management of risk.
Risk management in decision making
As per the view of Viscelli, Beasley and Hermanson., (2016) risk management plays a
vital role in decision making as it helps the organization to select best alternative, rank
alternatives for a specific risk management goal. For this all the risk are identified and prioritized
according to their impact on organization. After prioritizing risks only significant and important

risks are taken further to be managed. It also helps in protecting and enhancing stakeholder value
by managing unnecessary risks that can impact organization’s achievement of business
objectives. Risk management in decision making involves conflicting factors and alternatives, as
it involves lot of intangibles that can affect decision making. Many time risk managers need to
take decisions that have high risks associated with it based on unlimited information but they are
provided with limited information and time to take decisions and organize a particular data.
Many times, uncertainty and instability in business environment also affect risk management and
decision-making associated wit it. Whenever risk managers need to take and decision associated
with business network then, risk associated with the business increases as instability and
uncertainty associated with the network is high. So it can be said that complexity of risks
management associated with decision making related to business network is high. There are
multiple criteria based on which such decisions are taken so that risk associated with the network
can be reduced. Many times, changes in organization’s policies are also made so that complexity
associated with the network can be reduced which would eventually help in reducing risk
associated with it. The decision is to be taken by evaluating certain things and criteria. Here,
management play vital role as any incorrect decision can hamper process. The risk factor can
highly affect business strategy or goals that are developed for minimising risk.
In addition to this further elaborated by Arena, Arnaboldi and Palermo., (2017)
organizational decision-making faces various kinds of uncertainties that affect decision makers
choice which further leads to disaster or benefits for the organization. If there is any kind of
problem associated with decision making then it can lead to undesirable outcomes or loss. As
decision-making has various kinds of risks associated with it, so it is needed to be done in an
accurate manner so that organizational management is doe disturbed. There are several methods
that can helps in reducing risks associated with decision making, some of them are quantitative
in nature and some of them are qualitative in nature. All of these methods are used in risk
management in decision making. These methods also help in identifying uncertain events and
achievement of organizational objectives. This increases necessity of risk management in
decision making and decrease uncertain events and unnecessary outcomes probability.
2.4 Self-organisation and networking
It has been evaluated by Priesemann, (2015) that organisation consists of specific
process or methods which enables in performing operations in effective way. There is particular

system which are made for specific purpose and perform task in that manner. The way of system
can be changed as per requirements. Its scope is wide as for each system there are different
components. For similar system components may be same but they condition differ in which
they work. The procurement used in that are arranged in various ways. In terms of business it
means to attain goal by using most efficient path and with help of available skills, knowledge
and resources. Here, various approaches are being used to make continuous changes in that path.
So, through this it becomes easy to complete task in less time. Moreover, there are broad range
of processes which is used. Self organisation contains policies and practices that are followed in
process or method. Policies set some clear guidelines which enable to proceed in defined way.
Moreover, practices vary when there is any change in networking as both are interrelated. They
both act as base of networking in inter firm relationship and outside as well.
Every business possesses their own self organisation which enables them to perform task
using specified path. It is important for them to work basis of path so that they resources are
utilised efficiently. This path depends on nature of business and what process they are following.
In this resources and knowledge is also taken into consideration. Thus, by combining all these a
specified path is developed. According to Saeidi and et.al., (2019), by using that path there is
efficient use of skills and knowledge. In addition to it, on basis of path network is established. It
provides a brief description of what process or method are being used. However, any change in
path forces to modify network as well. The change in path are made for improvements. In this
also risks are identified that allow to maximise use of path. Thus, it increases efficiency of self
organisation. Along with it, networking plays vital role here. This can be identified that when
process is modified some components of network are either excluded or included. Therefore, it
brings some modifications in path as well. It is determined that changes are required in self
organisation and networking to eliminate risk. This has been really useful to maintain
consistency in operations. However, policies and practices are modified when risk is identified
and changes are made. Therefore, changes in practices enforces in designing of new process or
method.
In a research done by Savini, (2016) the process or methods are continuous changed due
to chances of risk. The ERM system identify risk and its degree. So, it is calculated that how
much impact risk have on self organisation. In similar way, networking is modified as well
which led to enhancing communication. New technology is installed which provide different

way of utilising resources, skills and knowledge. The outcome can also be in favour of
networking as practices are applied.
However, networking refers to way in which all system are connected with one another.
It also includes process through which particular method is followed and information is shared.
In this firm polices, procedure, resources, knowledge, etc. are defined and connected together.
Now days, businesses are framing things through self organisation. They consist of specific
process, practices and policies which are integrated together. So, it highly focuses on things
which is required in establishing relation between self organisation and networking. It is being
evaluated that certain standards are considered in reviewing things. Hence, standards are
replaced as well to redefine process.
Moreover, it is identified that self organisation and networking are integrated. Any
change in self organisation also changes networking. The systems are arranged in such a manner
that each of its component is used for a purpose. Furthermore, it also requires to change external
entities of network. The inter firm network is based on set criteria and procedure. In that each
department has to follow specific method or path to finish their task. For example- if business
has to share any information with government they have to follow particular method. Therefore,
it requires strong network in it. Other than this, for every particular thing there are some set
method in business which is followed. Alongside, both self organisation and networking are
dependent on each other. It means that whenever change occurs in one to them the other has to
be changed as well. However, it becomes necessary to view things and analyse to make things
easy.
As per view of Sekerci, (2015) in this as well risk may occur. So, this highly impact on
process or method. Hence, the risk has to be analysed so that it can be eliminated. A risk can
affect on entire process through which network is established. It depends on degree of risk that
how much it can impact. Also, for each process risk and its degree varies. It requires proper risk
management to evaluate overall networking. On basis of risk changes are done in practices and
policies are formed. There are various other processes that helps in managing risks across
boundaries as well where self-organization techniques are not used. Whenever there is a need to
manage risk across boundaries multileveled approach to risk management does not work as it not
effective across the organization. It requires risks to be communicated between various levels so
that it can be ensured that risk is addressed in a proper manner and appropriate methods are

being used for its management. Business needs to focus on risk to apply policies and both inter
ad outer firm relation in networking remains same.
Sweeting, (2017) said that there are many other things related to both concepts. It is
either inter firm relation or some other factors which force to make improvements in practices.
Business usually emphasis on forming effective policies to maintain flow of things. Doing risk
management allows firm to analyse future changes that can affect practices. Hence, there is
continuous monitoring of practices and certain improvements are made. It has to be linked with
process or methods that are currently being followed. In present times due to advancement in
technology several factors are arise which are affecting on networking. New practices are
implemented which has strengthened inter firm relationship. Furthermore, policies related to
sustainability is also taken into consideration within practices. As identified in both private and
public business self organisation and networking is different. It varies to a great extent as in both
separate method or process are followed. This requires proper monitoring of process to find out
that how change will enhance process or to what extent it benefits. There in need to measure
outcomes of self organisation so accordingly changes are made. However, the main concept in
networking is to incorporate with government. It enables in sharing of information and
communicating constantly. Moreover, it provides knowledge about factors and also on resources
which can be utilised. Through it, change in policies or ways of utilisation of resources is
determined as well. In view of (Agarwal and Virine, 2017) top management is responsible for
developing self organisation and networking. They decide that what process, how practices are
followed, how resources is to be utilised, etc. So, it entirely depends on top management to take
decision and make changes in practices. Also, they monitor overall practices and policies to find
out whether any changes are required or not and if yes in what areas it is needed. Along with it,
methods are evaluated to find out what will be its outcome. Then, consequently one specific
method is chosen. Similarly, network is established by management to define inter and outer firm
relation. It is done by separating resources and skill.
2.5 Networking and financial performance
According to Weldon (2018) the conceptual terms of networking in business for
improving the coordination between the supply chain. It may include the components: link,
flows, actors and mechanism. It is individually participants make coordination with other people

and share the information. The flow indicates the exchange of information where overall
mechanism of network are rules of interaction employed. Carnovale, Rogers and Yeniyurt (2019)
There are various types of benefits on business for increasing the wealth of employment in the
organization. it can be accelerating the knowledge of information regarding technology upgrade
which directly influence the business efficiency and performance. As per Ying, Hassan and
Ahmad (2019) it is required for organization to design an effective network structure that will
help for improving the performance. This type of structure is mainly defined the patterns of
employee which creating a strong coordination between them. Network literature has been
considered the embedded risk of organization when they will create external relationship with
another company. Sometimes, it is very crucial part to maintain the network connection between
one or two organizations. Hang-GeyerKlingeberg and Rathgebe (2019) stated that it has
emphasized the significance of the external capabilities and resource to company through
network structure. The performance of organization is directly depended on the network
connection because it helps to increase size of resources for business growth and development.
Since the network influence the flow of resources which is clearly measure the overall
performance of organization. network governance is an important element in terms of
coordination which help for creating a relationship with the multiple participants within
networks. It is based on the trust, support, power that will manage the sustainability in legal
aspects.
For every organisation its financial performance predicts market value. It means that how
much profits are earned and what are asset and liability of business. Also, it is important to
maintain financial performance to survive for long term growth. But in order to do so there must
be a strong inter firm relationship which will support in growth. However, if there is lack of inter
relationship the operations may be affected. It is essential to make pair of division and connect
with one another to develop relationship. A rise in revenue will led to gaining competitive
advantage. There is quick and frequent interaction among actors in network. This provides them
a clear overview of present situation. Hence, in case of any critical circumstances accordingly
measures are taken. Apart from that for different types of companies, there is required to analyse
and understand the enterprises risk that being taken when specifying the goals and objectives. It
will require to attain the desirable level of awards and rewards. In this way, it will require for

organization to understand the overall embedded risk and its level in the business process. It is
very important for companies to recognise their own prioritise and understand the weak points.
In the view of Weldon, (2018) a diversified network is necessary for a firm as it allow in
effective communication. In a network there are many components included which is makes it
easy to interact. Basically, networking also consists of using advance software and applications
which is used in business operation. It connects internal and external stakeholders of firm.
Moreover, a centralised network makes it simple to share data and interacting with any other
person.
As stated by Bromiley and et.al., (2015), in an organisation networking plays an
important role. This is because it enables in setting a strong communication through which data
and information is shared. Moreover, there is a systematic way of network which makes it easy
to get things done. However, all departments are interconnected in network which makes it easy
to perform operations. Also, with recent technological advancement firm is finding out ways to
improve their networking. It is because financial performance is directly linked to networking. It
has allowed to connect functions and operations. The result obtained is rise in growth and
revenue of firm. With help of network it becomes easy to analyse and study intensity of relation
between actors and departments. Also, it reflects that how quick the flow of communication
exists and what obstacles are faced in it. When there is strong networking in business it
automatically leads to effective exchange and flow of data. Apart from it, by using advance tools
and applications it makes it allows divisions to improve their productivity. With help of different
types of software there is ease in operation. Alongside it, networking identifies weak areas and
improve it. Thus, loopholes are solved with help of technology. Through this, the efficiency of
operation increases. It results in generating more revenue and there is increase in production.
It has been elucidated by Brüdern and et.al., (2016) there are many things considered in
networking as it is useful in increasing communication within and outside organisation. A
diversified network includes many types of relations. It is also spread in wide range that create a
positive impact on business growth. However, networking act as broker as it provides access to
gather and share data. It forms inter firm relationship by which it is easy to work together and in
effective way. So, if there is any inconsistency with help of network it can be overcome.
According to Choi and et.al., (2016) there is a direct relationship between networking and
financial performance. It can be said that network support in analysing overall situation and

immediately passing on data to one another. With help of this, it becomes easy to identify issues
and solve it. In that managers and expert can also participate by receiving message. Networking
needs to be internal and external as well. If an organisation is having a strong internal network
set up but there is weak external network than it will impact on its outer connection. They will
not be able to gather sufficient data and in case of critical situation ineffective decision are taken.
Furthermore, growth opportunities are also affected as it restricts firm to find out and evaluate
what they have to do due to lack of information. Similarly, having a resilient external network
and weak inter firm relation highly impact on firm operations. Beside getting external support
the goals and objectives are not be attained. Hence, it impacts on growth and development. In a
study done by Dobson and et.al., 2019) if departments are effectively connected with one
another there is appropriate communication between them. They also work together through
integration and are able to attain goals. However, in diversified network issues are identified
quickly as it includes different components in it. However, a strong networking makes it easy to
determine risk instantly and allowing proper actions to be taken. Therefore, it reduces impact on
operation and it remain consistent. In similar way, internal and external risks are identified as
well which make it easy to recognise from where risk arises. Moreover, if risk is identified in
networking then advance technology is used to enhance it. So, it brings change in way of
communication and inter firm relation. Thus, it ease in interaction within department. Usually, a
network is established to work together by developing strategies. It is used in enterprise risk
management where a systematic structure is followed. Henceforth, it can be concluded that if
risks are minimised or managed effectively its impact automatically decreased. The units are able
to improve their weak areas with more productivity. Thus, if in particular network connection
risk are solved then in similar way in diversified network as well risk can be minimised and
managed. So, increasing efficiency in one area contribute in generating revenue. Likewise, in
overall networking if improvements are done it results in increasing financial performance. Other
than this, use of advance technology also enhances staff productivity and allows in effective
utilisation of resources. It also leads to more investment in technology. In networking processes
or method of operation are connected as well. This gives insight about key operational
procedure, strategies, goals, etc. and how they are interlinked.
As stated by Donnelly, (2018) an example can be taken here that if a firm is stuck in
critical situation and there is lack of inter firm relation but strong external network. In this case

networking can help in gathering data from outside business. It means that if there is delay in
production then suppliers or vendors can be used. It states use of networking through which
financial performance is raised. This reflects relation of networking with finance. Besides, when
there is ineffective interaction within inter firm then operational efficiency is hampered. This
also impact on outcomes that are to be attained. When a business networking is highly spread
there is strong connection between departments. So, there is frequent interaction within them and
risks are managed properly. If associated risks are not understood well then it can lead to
incorrect strategies and incorrect implementation of such strategies which might disturb the
overall organizational budget, increase time duration or sometimes mislead others as well.
There are several challenges faced as well in networking. With frequent change in
technique or way of interacting operations are hampered. In this entire process is modified which
force to begin from start. It makes it difficult to again start things. Due to this, tasks are not
completed on time. In addition, inter firm relation is to be established again. So, sometimes
information shared is incomplete. The next operation remains stuck until complete info is not
received.

CHAPTER 3: RESEARCH METHODOLOGY
Third chapter in the dissertation describes the conduct of the research and allow the
researcher of its validity. This includes the overall approaches and type of the research, the
method of data collection that is primary, secondary, interview, survey etc. the detains from
where hen and with whom the research took place is defined. The method of data analysis is
defined that is there is application of statistical tools or not the analysis is statistical or discourse.
This chapter defines the tools and material used to analyse the data that is computer program, lab
equipment or others. The discussion of any obstacle faced in conducting the research and how
research have overcome the same is outlined and lastly evaluation and justification of the method
is presented in this chapter.
CHAPTER 4: DATA ANALYSIS
This chapter is about the result of the research. This section is structured around the sub
questions, hypothesis or the topic of the research. The result that are relevant to the research
objective and the research question are included here. Here, the results and discussion of the
result is presented under the same chapter in combined format. In the data analysis section of the
research study is presented with the help of graphs, tables and charts. Here all the finding of the
research data is presented and they are discussed and evaluated in order to reach to the final
outcome of the research study. This chapter also is visual presentation of the research findings
for the readers.
CHAPTER 5: CONCLUSION AND RECOMMENDATION
This is the final chapter of the dissertation where the overall conclusion of the research
is presented. The conclusion is reached after the data analysis chapter where discussion is
conducted to explore the meaning and implication of the result of the research. This is in relation
to the research question. The conclusion of the dissertation answers the main research question
which leave the reader with a clear understanding of the central argument. The conclusion refers
to a short section that comes before the discussion: first researcher directly states overall
conclusions, then discuss and interpret their meaning. The conclusion refers to the final chapter,
where it is a wrap up the dissertation with a final reflection on what research is about and how it
has been conducted.

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